An individual retirement account (IRA) is a savings and investment account with tax advantages. A traditional IRA uses pre-taxed dollars, while a Roth IRA uses after-tax dollars.
A Roth IRA is an individual retirement account (IRA) funded with after-tax dollars. It allows funds to grow over time without incurring taxes on the profits.
1. It can rapidly increase overall retirement savings rates.
2. The Mega Backdoor Roth IRA allows for significant tax-deferred growth when done correctly.
Cons of the Mega Backdoor Roth IRA
1. It’s not easy to contribute beyond the tax-deferred contributions.
2. Not all employers offer Rollover Roth IRA options.